After 11 days and still no deal made, members of the United Auto Workers are still on strike at General Motors factories across the country. It has been recorded as the longest walkout at GM since 1970. It has been found that union membership and power has been increasingly on the decline in the past 30 to 40 years, but still companies have a legal obligation to bargain in good faith with union members. With more work being sent abroad, foreign owned car plants in the South have turned back unionization efforts.
Will unions become obsolete in the near future? If so, what effect will that have on real wages of workers?
As far as unemployment rate goes, the decline of union membership could decrease unemployment rates. As we studied in class, this would get rid of structural unemployment as wages wont be forced to stay up higher than the equilibrium wage rate and the demand for labor will increase. However, since equilibrium wage is usually lower than what union workers demand, real wage may decrease.
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